Transfer of Equity Solicitors

A transfer of equity is the process of adding someone to or removing someone from the ownership of a property or increasing their share in the property. All or part of someone’s equity or share of ownership can be transferred. For example, if a couple owns 50% of a property each, one of them could transfer their share, or part of it, to the other.

It is important to take legal advice as there could be tax implications in doing this. It could also be construed as deliberate deprivation of assets if an individual was to transfer their share of a property to someone before going into long-term care for which they require local authority funding.

There are a number of reasons to transfer a share in property to someone else, including:

• As part of a financial agreement after a divorce or separation
• To add a new partner or spouse to the title of a property
• To transfer your property as part of Inheritance Tax planning

The actual process of checking a title and drawing up the transfer document does not take long and could be done within a month. However, there are often other issues that need to be dealt with. For example, if the transfer is being done as part of a financial settlement in a divorce then it may be necessary to wait until all issues have been agreed upon and a court order is in place.

If the property is subject to a mortgage, then it will be necessary to obtain the mortgage company’s consent to remove someone from the mortgage or to add a new person. This could potentially take the mortgage company several weeks to deal with.

If we represent you in transferring equity, then the first task is to obtain a copy of the title to the property. We will check the legal title and be able to see any charges over it, such as mortgages. We will also check the identities of the owners and any new owner.

We would then draw up the transfer document and, where necessary, wait for the mortgage lender to approve the transfer and send their loan documentation if someone new will be taking on the mortgage.

You will then be able to sign all the documentation in front of a witness and we will register the transfer on your behalf at HM Land Registry.

If there is a mortgage over the property, your lender will need to consent. If someone is being removed from the property ownership and from the mortgage, the lender will need to be assured that you can manage the loan on your own and they will only consent to the transfer if they are satisfied on this point.

If you will be adding someone to the title of the property, that person will also take on the mortgage and the lender will vet them in the usual way and send out a mortgage agreement for them to sign.